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- PPF tax saving option
- How to save tax by investing in Senior Citizens Savings Scheme (SCSS)?
- Financial Life Pyramid
| Posted: 22 Oct 2012 04:15 AM PDT Tax Saving Mutual Funds Online
Call 0 94 8300 8300 (India) THE Union government has increased the interest rates on public provident fund (PPF), national savings certificate (NSC) and post office savings scheme by 0.20 to 0.50 per cent from April 1, in a bid to make them competitive and enthuse retail participation. In addition, several banks have once again increased the interest rates on fixed deposits (FDs), including tax-saving FDs. So, should you invest in small-savings schemes or look at other comparable products in the market such as FDs? There are various factors that you should consider before choosing a savings instrument such as liquidity benefits, lock-in period, tax benefits and returns that the savings instrument is offering. Let us look at the most popular instruments.
NSC comes at par with tax saving FDs: NSC comes with a lower lock-in period of five years and there is no upper investment limit. The interest rate for a five-year NSC is 8.6 per cent. The government launched a new NSC with a 10-year maturity last December that will offer an interest rate of 8.9 per cent from April 1.
You can consider a 10year NSC if you are more inclined towards debt instruments and can lock-in money. This instrument is more beneficial for those in the 30 per cent tax bracket.
So, for example, if you are in the 30 per cent tax bracket and have invested in a fiveyear NSC, your post-tax return will be 6.02 per cent and for a 10-year NSC, your posttax return would be 6.23 per cent. In addition to offering a good interest rate, another noteworthy feature of NSCs is that the annual interest accrued can be considered as a fresh investment under section 80C. Also, you can take a loan against your NSC.
Fixed deposits: These instruments are suitable for those who are not in the higher tax bracket and have a medium-term goal and for those who would require money in the near future.
The five-year, tax-saving bank deposit qualifies for tax benefits under Section 80C.
However, the income above Rs 10,000 qualifies for tax deduction at source. Take for instance, ICICI Bank Tax Saver Fixed Deposit (five years) that offers an interest rate of 8.75 per cent. If you are in the 30 per cent tax bracket, your post-tax return will be 6.12 per cent, almost the same as a five-year NSC.
PPF continues to score over all tax saving instruments: From April 1, the interest rate offered on PPF will be 8.8 per cent from the earlier 8.6 per cent being offered since December 1, 2011.
PPF's interest rate every year will be linked with the 10year government securities rates. Under Section 80C, PPF qualifies for a tax deduction up to Rs 1,00,000.
Also, the income earned from PPF is not taxable and that makes it the most superior tax-saving product.
PPF also has an edge over the employees' provident fund (EPF) whose rate is not market-linked and is at present offering 8.25 per cent.
PPF should be a mandatory component in every retail investor's portfolio because of its post-tax returns. If you can afford, invest the full Rs 1,00,000 (the maximum you can invest).
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
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| How to save tax by investing in Senior Citizens Savings Scheme (SCSS)? Posted: 22 Oct 2012 01:58 AM PDT Call 0 94 8300 8300 (India) It allows a retired person having a lump sum to invest it at a reasonably good interest rate. If you are 60 years old (or took voluntary retirement at 55), you are eligible for the scheme. Minimum Investment under the scheme is Rs. 1,000 and maximum Rs. 15 lakhs. The amount invested into SCSS is eligible for tax deduction under Section 80C thus reducing your taxable income in the year of investment.
Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them
OR
You can write back to us at PrajnaCapital [at] Gmail [dot] Com
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Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs
Download Mutual Fund Application Forms
Best Performing Mutual Funds
------------------------- Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) 1. ICICI Prudential Tax Plan Invest Online 2. HDFC TaxSaver Invest Online 3. DSP BlackRock Tax Saver Fund Invest Online 4. Birla Sun Life Tax Relief '96 Invest Online 5. Reliance Tax Saver (ELSS) Fund Invest Online 6. IDFC Tax Advantage (ELSS) Fund Invest Online 7. SBI Magnum Tax Gain Scheme 1993 Invest Online 8. Sundaram Tax Saver Invest Online
This is a popular investment with senior citizens as it offers liquidity as well as periodic income – interest is paid out quarterly.
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| Posted: 21 Oct 2012 11:37 PM PDT Call 0 94 8300 8300 (India) The pyramid of financial life can be divided broadly in three parts. The foundation is protection or risk management, in the middle is wealth accumulation and on top is wealth distribution. INSURANCE There are things beyond our control and we should be prepared for such untoward incidents and always be ready with a plan B. By the way, most people don't even have a plan A. But let me explain both. Plan A: Everything goes well and one is able to fulfil his financial goals out of his regular income and investment. Plan B: If something goes wrong, something that we can't foresee today, insurance takes care of our plan A. So, insurance builds the foundation of financial planning for any family. Three of the most important policies that anyone should have are term plan, health insurance and accident insurance. Term plan: Term policy is insurance in its purest and simplest form. You pay premiums because there is a guarantee that if something happens to you, your family will be paid out the pre-decided amount. Hence, you have peace of mind that even if you are not there, those loved ones you leave behind will not have to bear any financial loss. Term insurance is protection against risk of life. Premium rises with age, so if you delay it for some years, your premium will be substantially higher. In case, you are diagnosed with some critical illness, either you will be denied insurance or your premium rate will be higher by 25 - 50 per cent. In case something happens to the bread winner in this period, the consequences are beyond any explanation. Health insurance: Today, one of the world's biggest problems is health care. This is getting expensive by the day. Even Indian doctors want to use the latest available technology and the downside of that is the huge associated cost. So, a health insurance policy can be really helpful. The biggest problem is if you develop a disease in this period and then approach an insurance company. You will either be denied a policy or that disease will be excluded. Even it is included, this would be done only after three to four years. You will have to keep praying the disease does not reoccur during the interim period. Ask any friend whose family member was recently admitted in hospital - "what was the total cost?" There is a high probability the answer will give you a heart attack. If you survive, buy a health insurance policy the next day. Accident insurance: Sometimes, life plays strange games. Think of someone in the 30s, who loses legs or hands in an accident. From being the biggest asset of the family, he suddenly becomes an economic liability. A comprehensive accident policy can be really helpful at such times. WEALTH ACCUMULATION Now, moving to the second level, which every one appreciates is the most important part of their life. Let us assume you are 30 and have planned for retirement at 60 and would like to invest monthly. At 15 per cent annual return that one expects from equity mutual funds, you will come up with some astonishing numbers. You have three options - invest `5,000 a month starting now or 10,000 a month when you turn 40 or save `30,000 a month in the last 10 years of your working life. The total investment in the final option will be double of first one. And the retirement corpus - in the first case, it will be 2.82 crore. In the second case, it will be `1.33 crore. In the last case, the accumulated amount will be just `79 lakh. Say you calculate the amount the other way. Say you need `2crore at the time of your retirement. Once again you have three options, starting at 30, 40 or 50. The monthly investment when you start at 30 will be `3,551and total investment will be `12.7 lakh. In the second case, the monthly investment needed will be `15,071 and total investment will be `36.26 lakh. And, if you start at 50, the figures are shocking - monthly investment will be 76,040 and total investment will be 91.2 lakh. You can clearly see the cost of delay is huge. Due to the power of compounding, investments made in the initial years are the main chunk of your final corpus. The amounts required to compensate time delays are huge. ESTATE PLANNING Division of assets is a sensitive matter and people keep delaying it but there is again a huge cost of delay. People fail to write a will or even check the basic things like nominations and so on for investments. A sudden demise makes the lives of their families miserable. Smooth succession planning is a very important part of one's life. So, don't delay important financial decisions and consult a good financial advisor now. Being casual about finances now will spell trouble in future. So act now. Like the NIKE slogan, ' Just do it '. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
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Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now  |
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